London, June 15 (BNA): Gold prices rose from a three-month low on Thursday as dollar and bond yields crept lower after US economic data, although concerns about a rate hike by the Federal Reserve capped the gains.
Spot gold rose 0.4% to $1,950.59 an ounce by 9:52 AM ET (1352 GMT), after hitting its lowest since March 17. US gold futures fell 0.3% to $1,962.90, Reuters reported.
US industrial output unexpectedly fell by 0.2% in May, missing expectations for a 0.1% increase, while a separate report showed initial jobless claims unchanged at 262,000 for the past week.
“This data prompts some price corrective action from yesterday’s strong price moves in the Dollar Index and Treasury yields and also some short covering,” said Jim Wyckoff, senior analyst at Kitco, who saw prices trending lower in the near term. .
The dollar index fell 0.4% while the 10-year Treasury yields fell, supporting demand for non-interest-bearing bullion.
“But today’s data will be overshadowed by the long shadow of yesterday’s FOMC meeting,” Wyckoff said, adding that the three-month low hit last night also put some technical selling pressure on gold.
The central bank’s Federal Open Market Committee (FOMC) left interest rates unchanged on Wednesday but noted that borrowing costs may still need to rise by up to half a percentage point by the end of this year.
Markets now see a 65% chance of a Fed rate hike in July, according to CME Fedwatch.
“Physical markets are showing some signs of life in this current price weakness, but the main driver here, again, is the outlook for the Fed’s hike cycle,” said StoneX analyst Ronna O’Connell.
Spot silver fell 0.8 percent to $23.73 an ounce, platinum fell 0.7 percent to $982.31, while palladium fell 0.7 percent to $1,376.70. (Reporting by Deep Vakil and Suhair Dareen in Bengaluru).
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